Investment Q&A

Q: My question is not about Wajax specifically, but using Wajax as an illustration in the context of my question.
In previous answers, you have repeatedly expressed a leaning towards shedding losing stocks and replacing them with others currently showing promise, on the premise that there's an opportunity cost involved in holding the "loser".
Assuming the company (Wajax in this case, on which I'm down almost 50%) is a well-managed company, and in the absence of known problems, and the company is merely being battered by economic conditions WHICH WILL (EVENTUALLY) TURN AROUND, wouldn't any replacement stock have to double in value (including reinvested dividends) before reaching breakeven? And isn't it likely that the loser stock, Wajax in this case, will likely double in value sooner than (almost) any replacement stock (provided the replacement isn't of substantially higher risk profile)?
Or, to put it a different way, isn't the opportunity cost of continuing to hold the losing stock effectively nil?
Thanks for your and your team's continuing effeorts to educate us! Lotar.

Q: For investing books, what would you guys recommend for the middle of the road, fairly experienced, investor, thanks?

Q: I often see you and others mentioning that a stock price went up or down "on high volume". How should we interpret this? Obviously the high volume means there were many buyers. And of course there were equally many sellers. Is this a good sign for the future (lots of buyers) or a bad sign (many sellers)? I am quite puzzled about how high volume should be interpreted.

Q: More a question about strategy. It seems my discount broker charges me around 2.5% for the exchange conversion when I buy a US stock, and probably the same for dividend payments and sells. Is there any way I can reduce these charges? Thank you.

Q: Rajeev asked a question today about CCL.B in which he stated the RSI is now 14. On TD Waterhouse the RSI is currently listed as 55. So the natural question is to ask you what you would use a reliable source for RSI? Thank you.

Q: Hello 5i team. Suspect you've been asked this before, but wasn't able to locate the topic on the Q&A part of your site.

Are you (or any of your subscribers) able to provide a reliable source of information on current payout ratios for Canadian dividend stocks? I've been relying on the Globe Investor 'Watchlist' tool, but sometimes the ratios quoted don't seem right e.g., TransAlta at 27.30% compared to latest edition of Money Magazine at 720%. Lots of dividend-focused websites out there, but the ratios quoted seem all over the map.

Any suggestions would be appreciated. Thanks.

Q: Can you list five or more small cap companies that have initiated dividends in the past two years or so? Where would I find this sort of info, I don't have Bloomberg. Thanks.

Q: Follow-up question re. yesterday's 8 cent drop on high volume. I noticed volume picked up around noon yesterday and the price started dropping. Lots of different brokers on the sell side. The really big volume trades occurred much later in the afternoon and at much lower prices. It almost looks like the traders and computer programs detected a large SELL order from say a mutual fund (for quarter-end window dressing??).
If this is true, how do the other brokers/traders "smell" this out and front-run the large sell trade?? I'm assuming that any quarterly reports reflect the mutual fund's trade date position (ie. not settlement date).
Please help me out in understanding what took place yesterday. Thxs, Ralph.

Q: Two fund managers on BNN have referred to VRX as "broken".
Is this another way of saying "sell", no hope?

CV

Q: Hi Peter
I have read that U.S. building permits are by far the most reliable leading indicator on where the economy is headed,where would I go to find this information, and would you use monthly data over a 3 or 6 month period to form your opinion.
Thanks

Q: My broker is suggesting that I sell half my position in bank stocks and buy the:
TD Canadian Banks Index-Linked Autocallable Notes Series 9 due October 14, 2020 (non principal protected).

In his justification he is stating that "price decline in bank stocks has created an attractive Cdn Banks auto-callable note with a 10% payment at the anniversary date. I'm not sure if the bank stocks will rally that much over the next 12 months but, they only have to hold their value for this investment to payout 10%."

I appreciate your opinion on this switch as well as your opinion on linked notes in general. I found them so confusing and it appears to me that the issuer is making money in any situation they consider.

I echo other members who complements the excellent value of your service. Unfortunately it doesn't work for those who naively think that the market will always go up and every recommendation will make money in up and down market.

Thanks

Q: Peter As a 5I member for a long time your service has been great ,This current market turmoil will pass and if you have good companies you will be ok in time.
stan

Q: Hi Peter and Team!! Between seeking alpha, some financial papers and Jim Cramer, there is a lot of noise out there. For a small retail investor, things can get a little confusing and panic generating at times. I subscribe to 5i and the Investment reporter...my two beacons in the fog... could you suggest any other reliable information sources that give a level headed view of the markets both here and in the world overall? Kind Regards, Tamara

Q: reading the questions and answers to this massive downturn-
I think by far the best response comes from jerry who says I don't follow 5i's long term advice or their portfolios, I get my value from specific recommendations, answers to questions, and the basic integrity of 5i.
the key part of jerrys quote is long term advice--peter has been very clear that 5 years is his time frame and yet during this downturn especially with cxr everyone is in a panic.
as for me my time frame is far far shorter than 5 years-- and I think a stock like knight and currency exchange-- I own lots of both we will be rewarded long before 5 years is up and if I am not I always have the option to sell.but every investors temperament is different and if this downturn is too painful then sell and wait it out. dave

Q: Hello,

Can you tell me where a retail investor can find the credit ratings for US & CDN companies?

Thanks

Q: Hi

Just my 2 cents on "Josh" and when to sell. I believe this service, while one of the better ones, does not distinguish between a good company and a good stock price to buy that company.

If you could sharpen your pencil to tell members if the stock is attractively priced at the moment, Josh may not have purchased when he did.

Regards
John

Q: Just wanted to add a note of encouragement to the discouraged ones out there. I used to feel as Josh feels when I was out there on my own, but then 5 I came along.

Through 5I

Bought ATD.B at $30. It's now $61.09, as I write this.
Bought BYD.UN at $35. It's $59.65
Bought CXI at $21.22 It's $26.77
Bought ESL at $30. It's now $53.22
Bought WSP at $31.65. It's now $44.95

These are awesome returns -- by anyone's standards.

Certainly, I've had a few losses, but by and large, the gains outweigh the losses by quite a margin. Additionally, I would add that these losses tend to come from my lack of patience -- or my fear. I end up selling too soon, then kicking myself all over the block once the stock bounces back to all-time highs.

I realize the frustrations that may come in the investment world, but sometimes we get so disappointed in a few things that we end up flinging the baby out with the bathwater. Our money -- which is always hard-earned is a very emotional thing to us all: we end up taking the losses much too personally, and glossing over the wins by patting ourselves on the back too much, and not giving credit where credit is due.

If I make a 60% return on a stock, I tend to take the credit. If I make a 15% loss, I'll blame Peter (smile) ... or in my case, my brother Frank, the famous Frank Effect guy. ; )

This is simply a note of encouragement to Josh, to hang in there. ... And an extra note of thanks to the "swamis" at 5I, who though they do not claim clairvoyance, I swear they must at least have been reading the tea leaves!

Q: To me the key to knowing when to sell is knowing one's temperament. Once you know it, you can listen to what 5i suggests or google "when to sell stocks" and get a bunch more ideas. Choose the ideas that align with your temperament. I don't think an investor is going to be happy following some stranger's temperament. You have to follow your own.

I see a lot of people writing 5i, unhappy with their 30% and 40% losses. What they're saying is that their temperament can't handle those losses. No law says they had to suffer those losses. They were free to say, "Screw this, I'm getting outa here." But they didn't. They were aligning with 5i's temperament, not their own.

For me, I don't follow 5i's long term advice or their portfolios. I get my value from specific recommendations, answers to questions, and the basic integrity of 5i.

Q: I would like to add a member's perspective to Donald's question about "when to sell".
I have been watching BNN since the network started. Please know that the analysts who appear are for the most part there to promote themsleves and their funds. They are not "bad" people, it is just the way the game works. If you look at their funds performance over time, I can assure you that most are not raking in the profits and killing the market. They amplify their winning calls and downplay their errors (even when they have gotten things terribly wrong). I watch only to glean the odd bit of info on a company I am following, or to guage how others are thinking in the market.
If you think market timing is a good strategy, please reconsider. One might do as well betting on NFL games. Maybe there are a few souls who can succeed at that, but they are surely very rare.
For a nominal cost, Peter has provided us with a diversified portfolio of quality companies. It really dosen't get any better than that. Hold them and they will recover when the market eventually does. Resist the urge to trade too frequently. Don't be swayed by the boasting of those on BNN.
Cheers
John

Q: as a subscriber I am very disappointed in your service and guidance .
At this moment all the stocks you recommended are down.
On top of this I had to pay for your advice and keep holding on and loose more every day.
Thought you would steer the investment ship better in troubled times as well